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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2008-2009 Retailing 13 CHAPTER
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 2 Learning Outcomes Discuss the importance of retailing in the U.S. economy Explain the dimensions by which retailers can be classified Describe the major types of retail operations LO 1 LO 2 LO 3
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 3 Learning Outcomes Discuss nonstore retailing techniques Define franchising and describe its two basic forms List the major tasks involved in developing a retail marketing strategy Describe new developments in retailing LO 4 LO 5 LO 6 LO 7
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 4 LO 1 Retailing All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use. Retailing
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 5 LO 1 The Role of Retailing Over 1 million U.S. retailers employ more than 15 million people Retailers account for 11.6 percent of U.S. employment Retailing accounts for 13 percent of U.S. businesses Retailers ring up almost $4 trillion in sales — nearly 40 percent of the U.S. GDP Industry is dominated by a few giant organizations, such as Wal-Mart
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 6 REVIEW LEARNING OUTCOME LO 1 The Importance of Retailing 11.6% 13% 40% Retailing as a % of U.S. employment Retailing as a % of U.S. businesses Retailing as a % of GDP
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 7 LO 2 Classification of Retail Operations Ownership Level of Service Product Assortment Price
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 8 LO 2 Classification of Ownership Independent Retailers Independent Retailers Chain Stores Franchises Owned by a single person or partnership and not part of a larger retail institution Owned and operated as a group by a single organization The right to operate a business or sell a product The right to operate a business or sell a product
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 9 LO 2 Level of Service Full Service Self Service Discount storesExclusive storesFactory outlets Warehouse clubs
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 10 LO 2 Types of Stores and Their Characteristics Assort-mentPrice Gross Margin Broad Narrow Broad Med-Narrow Medium Med-Broad Broad Med-Narrow Narrow Mod-High Moderate Mod High Moderate Mod Low Mod Lo-low Low-very low Low Low-High Mod High High Low Mod High Low Mod Low Low Low-High Type of Retailer Specialty Store Supermarket Convenience Store Drugstore Full-line Discounter Specialty Discounter Warehouse Clubs Off-price Retailer Restaurant ServiceLevel Mod Hi-High High Low Low-Mod Mod-Low Low Low-High Department Store
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 11 LO 2 Price The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted. Gross Margin Gross Margin
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 12 Major Types of Retail Operations LO 3 Department Stores Specialty Stores Supermarkets Drugstores Convenience Stores Discount Stores Restaurants Online http://www.walgreens.com
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 13 Categories of Discount Stores LO 3 Full-Line Discounters Specialty Discount Stores Warehouse Clubs Off-Price Discount Retailers
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 14 Discount Stores LO 3 Mass Merchandising Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 15 Discount Stores LO 3 Supercenter Retail store combining groceries and general merchandise goods with a wide range of services. Full-line discounter Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded “hard goods”.
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 16 Specialty Discount Stores LO 3 Category Killers Specialty discount stores that heavily dominate their narrow merchandise segment.
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 17 REVIEW LEARNING OUTCOME LO 3 Types of Retail Operations Department Stores Specialty Stores Supermarket Drugstores Convenience Stores Discount Stores Restaurants Scrambled Merchandising Full-line Specialty Warehouse Off-price supercenter extreme- value category killer factory outlet
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 18 LO 4 Nonstore Retailing Automatic Vending Direct Retailing Direct Marketing Electronic Retailing
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 19 LO 4 Direct Retailing Door-to-Door Office-to-Office Home Sales Parties Online http://www.avon.com
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 20 LO 4 Types of Direct Marketing Telemarketing Catalogs & Mail Order Direct Mail Electronic Retailing Shop-at-home networks Online retailing
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 21 REVIEW LEARNING OUTCOME LO 4 Nonstore Retailing Techniques Vending Direct retailing Direct marketing Electronic retailing direct mail catalogs telemarketing online shop at home Nonstore Retailing
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 22 Basic Forms of Franchising LO 5 Business Format Franchising Product and Trade Name Franchising Product and Trade Name Franchising
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 23 Franchising LO 5 Product and Trade Name Franchising Dealer agrees to sell in products provided by a manufacturer or wholesaler. Business Format Franchising Business Format Franchising An ongoing business relationship between a franchiser and a franchisee.
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 24 Retail Marketing Strategy LO 6 Develop the “Six Ps” Define & Select a Target Market
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 25 Defining a Target Market LO 6 STEP 1: Segment the Market STEP 1: Segment the Market Demographics Geographics Psychographics
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 26 Choosing the Retailing Mix LO 6 STEP 2: Choose the Retailing Mix STEP 2: Choose the Retailing Mix Product Price Promotion Place Personnel Presentation Online http://www.publix.com
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 27 The Retailing Mix LO 6 Target Market Product Price Place Promotion Personnel Presentation
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 28 Choosing the Retailing Mix LO 6 Product Offering Product Offering The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 29 Retail Promotion Strategy LO 6 Advertising Public Relations Publicity Sales Promotion
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 30 The Proper Location LO 6 Economic growth potential Competition Geography Choosing a Community Choosing a Site Freestanding Store Shopping Center Mall
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 31 Important Factors for Site Choice LO 6 Neighborhood socioeconomics Traffic flows Land costs Zoning regulations Public transportation Site’s visibility, parking, entrances and exits, accessibility, and safety Fit with other stores
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 32 Shopping Center and Mall Locations LO 6 Design attracts shoppers Activities and anchor stores draw customers Ample parking Unified image Sharing of common area expenses Expensive leases Failure of common promotion efforts Lease restrictions Hours of operation Anchor store domination Direct competitors Consumer time limits AdvantagesDisadvantages
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 33 Retail Prices LO 6 Quality Image High Price Low Price Good Value Single Price Point EDLP
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 34 Presentation of the Retail Store LO 6 Atmosphere The overall impression conveyed by a store’s physical layout, décor, and surroundings
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 35 Presentation of the Retail Store LO 6 Employee type and density Merchandise type and density Fixture type and density Sound Odors Visual factors Online http://www.apple.com
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 36 Personnel and Customer Service LO 6 Suggestion Selling Trading Up Two Common Selling Techniques
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 37 Customer Service for On-Line Retailers LO 6 Easy-to-use Web site Product availability Simple returns
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 38 REVIEW LEARNING OUTCOME LO 6 Developing a Retail Marketing Strategy
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Chapter 13Copyright ©2009 Cengage Learning Inc. All rights reserved 39 LO 7 New Developments in Retailing Interactivity Consumers are involved in the retail experience. Consumers are involved in the retail experience. M-commerce Purchasing goods through mobile devices.
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